The AIOFP says, “Please send this information onto your clients for their consideration.”

The Albanese Government has imposed the most unethical and devious legislation onto Consumers and Financial Advisers in living memory. The CSLR will dramatically increase the cost of financial advice and will weaken Consumer protection.

The Opposition did not originally oppose its passage through Parliament but have now pledged to change it after realising the unintended consequences. The Albanese Government wants to defer any action until after the election, something we disagree with.

BACKGROUND BRIEF- Commissioner Hayne recommended in the 2019 Banking Royal Commission Final Report that a Compensation Scheme of Last Resort [CSLR] be established to protect Consumers from poor advice and product failure. It specified that Advisers paid for poor advice and Banks/Institutions paid for their products failing. The Advice Community supported its establishment, the Banks and Institutions did not.

THE PROBLEM – Unfortunately, the legislation was manipulated by the Institutional/Banking lobby in conjunction with Canberra Bureaucrats to avoid accountability on any of their own products if they failed. In a cruel twist the legislation was further manipulated to ensure only Financial Adviser’s and their clients pay for the failed products, NOT the Institutions, an utter outrage – here is a link for further information https://www.aiofp.net.au/2025/02/25/the-cslr-hornswoggle/

RECOMMENDED ACTION – only Politicians can adjust the CSLR legislation to ensure Institutions are responsible for their own failed products and the best time is leading into a Federal Election when all Politicians are desperate for your vote.

Advisers and Consumers need to send a clear message to their local Politicians that unless their party commits to changing the CSLR Legislation before the election they will be positioned last on the ballot, they will not like that.

We suggest your client sends the following message to the sitting Member and Opposition candidate in their electorate –

Dear…, I am greatly concerned with the additional costs that may be imposed on my family by the Compensation Scheme of Last Resort [CSLR] flawed structure. Unless it is addressed before the Federal Election it will influence my families voting habits, we will put our least preferred party last on the ballot.

We will be seeking further political direction from our Financial Adviser.

It is critical that Consumers and Financial Advisers send a very clear message to all Politicians and Canberra Bureaucrats that we not will not be trodden on.

If you have any questions or suggestions, please contact us.